FOR IMMEDIATE RELEASE AT
TUESDAY, NOVEMBER 12, 1996 (202) 616-2771
TDD (202) 514-1888
JUSTICE DEPARTMENT REQUIRES WESTINGHOUSE AND INFINITY TO DIVEST
RADIO STATIONS IN BOSTON AND PHILADELPHIA IN ORDER TO GO AHEAD
WITH LARGEST RADIO INDUSTRY MERGER IN HISTORY
Action Marks Third Challenge of a Radio Merger
Since Passage of 1996 Telecommunications Act
WASHINGTON, D.C. -- The Department of Justice today reached
a settlement with Westinghouse Electric and Infinity Broadcasting
allowing the two companies to form the nation's largest radio
group, but only if the companies divest a radio station in both
Philadelphia and Boston. The new group will operate 77 stations
in 13 major markets.
The Department's Antitrust Division today filed a civil suit
in U.S. District Court in Washington, D.C., to block the merger
of Pittsburgh-based Westinghouse and New York-based Infinity. At
the same time, the Department filed a proposed settlement that,
if approved by the court, would resolve the suit.
"We're here to preserve competition, not to prevent
mergers," said Joel I. Klein, Acting Assistant Attorney General
in charge of the Department's Antitrust Division. "If you do a
deal that doesn't threaten competition, or you fix the parts of
it that do, you won't have a problem with us. That's the message
the radio industry should take away from this case."
The Department said that Westinghouse's acquisition of
Infinity stations in Philadelphia and Boston, giving Westinghouse
over 40 percent of the radio advertising revenues in each city,
would eliminate competition between them for radio advertisers
trying to reach particular demographic groups.
After the merger, the alternatives available to advertisers
trying to target these demographic groups would be inferior,
reducing the advertisers' ability to reach these listeners
through competing radio stations. This would allow the merged
firm to increase prices to advertisers and to substantially
reduce competition for radio advertising revenue in the $179
million Boston market and the $194 million Philadelphia market.
The proposed settlement requires the divestiture of WBOS
92.9 FM in Boston and WMMR 93.3 FM in Philadelphia, leaving
Westinghouse with five stations in each city. The divestitures
reduce Westinghouse's control over radio stations appealing to
the affected demographic groups in each city, and preserve the
competitive alternatives available to advertisers seeking to
reach these listeners.
This is the third case in which the Department's Antitrust
Division has required merging radio station companies to
restructure their deals since passage of the 1996
Telecommunications Act. Klein said that the radio industry is in
the midst of rapid consolidation following passage of this Act,
which relaxed previous limits on radio station ownership.
Although the Act removed certain limits, it explicitly
acknowledged the role of antitrust enforcement, explaining that
"nothing in this Act... shall be construed to modify, impair, or
supersede the applicability of any of the antitrust laws."
As required by the Tunney Act, the proposed consent decree
will be published in the Federal Register, together with the
Department's competitive impact statement. Any person may submit
written comments concerning the proposed consent decree during a
60 day comment period to Craig W. Conrath, Chief, Merger Task
Force, Antitrust Division, U.S. Department of Justice, Suite
4000, 1401 H Street, N.W., Washington, D.C. 20005, telephone
(202) 307-0001.
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